Apple Profits to iPhone Nay-Sayers: Nanny Nanny Boo Boo

Apple issued a big “screw you” to detractors yesterday when they announced their quarterly profit results.  The cold, hard facts are below, but in recent weeks, the media has issued shrill warnings that Apple had lost its touch and become “arrogant.”  Apple had lost its way.  Apple was producing crappy products.  Antennagate.

Working in the financial sector, I know that the proof is always in the earnings pudding – and in Wall Street’s take on it.  Here’s what Apple announced, according to yesterday’s Wall Street Journal:

  • Quarterly profit surged 78%, as the company booked strong initial sales of its iPad tablet computer and the latest version of its smartphone, the iPhone 4.
  • Apple’s revenue in the quarter ended June 26 rose 61% to $15.7 billion. SIXTY ONE PERCENT.
  • Apple is selling iPads and iPhones “as fast as we can make them” and “working around the clock to try to get supply and demand in balance.”
  • Shares of Apple rose 2.5% in after-hours trading. The stock closed Tuesday at $251.89 on the Nasdaq Stock Market.
  • Apple sold 3.5 million computers, up 33% from a year ago.
  • Apple said it sold 3.3 million iPads since the tablet went on sale, generating revenue of $2.16 billion. The company said the average sales price for its iPad was $640, suggesting many customers opted for higher-priced models with cellular-data service.
  • Research company iSuppli earlier raised its estimate for iPad sales in 2010 to 12.9 million from 7.1 million, saying the only limitation was production capacity, not demand.
  • While analysts were also concerned that consumers might hold off buying iPhones in the quarter until the iPhone 4 was released, Apple sold 8.4 million iPhones during the period, up 61% from a year ago.
  • Apple posted a fiscal third-quarter profit of $3.25 billion, or $3.51 a share, compared with $1.83 billion, or $2.01 a share a year earlier.

I  could go on and on, but let’s first address the iPhone 4.0 issue.  According to Jobs’ press conference, demand has not abated since “Antennagate.”  People still want the phone.  BUT – if iPhone sales fell, other sectors are still strong.  iPads are selling as fast as Apple can make them and Macs sales are up by a third.  Even if they did not sell a single iPhone 4.0, they would have generated a profit.

I held my tongue in recent weeks because I wanted to see what the earnings and Wall Street said.

The verdict for Apple?

Screw you, Antennagate.  We’re as strong as ever.

Mark

P.S. – Since this post touches on the financial sector, I’ll let you know that the thoughts expressed in this post are mine and mine alone and do not reflect those of the Chairman, Commissioners or my colleagues at the Securities and Exchange Commission.  So there.

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